In its latest bi-monthly letter, the centre quoted unnamed European intelligence sources as saying that that an "economic spy network" was being run from an educational institution in Belgium and had been under surveillance for two years.

The ring, the sources said, uses a group of students and internship seekers as a "front organisation", with no obvious links to Chinese diplomats, and dozens of these agents are planted around northern Europe.

The report listed the Netherlands, Britain, Germany and France as places where the ring is operating and said that "it is trying today to plant moles in central Europe."

"Its main targets: laboratories and big universities," the centre said.

The French newspaper Le Monde identified the front group as "The Chinese Students and Scholars Association of Leuven" (CSSAL), which it said was made up of 400 to 700 students and researchers at Leuven's Flemish Catholic University.

The revelation follows the case of a 22-year-old Chinese woman who is being investigated in France for spying on the big car parts maker Valeo, which employed her.

The woman, identified as Li Li Whuang, was placed in preventive detention in France in late April after Valeo filed a complaint for "abuse of confidence" and "illegal database intrusion".

During a search of her home, police found six computers and two hard drives with a "huge capacity" that contained material considered confidential by Valeo's management.

The Chinese national, who has denied the accusations, had worked since February as an intern in Valeo's research and development division in southwest Paris.

It is believed she may have copied features of a number of cars made by different companies that are still on the drawing board.

"She was a good little soldier," a source close to the investigation said, adding that preliminary evidence taken from the computers implicated her.

At the same time, the woman -- who already holds diplomas in mathematics, applied physics and fluid mechanics -- was studying at a university in Compiegne, northeast of the French capital.

A source close to the inquiry described the woman, who speaks German, Spanish, English, French and some Arabic, as "brilliant" and of "exceptional competence".

US underestimates China's rising power: former secretary of state Lisbon (AFP) May 11, 2005 The United States administration underrates the growing economic and political power of China, former US secretary of state Madeleine Albright meanwhile said here Wednesday.

"I think that at the least the United States underestimates the growing power of China. It is an immense country with energetic people which has great ambitions for itself," she told reporters in Lisbon after delivering a speech on democracy.

"What we did while we were in office was to try to bring China into the system," said Albright, who served as Washington's top diplomat under president Bill Clinton.

She said Washington's support for the entry of China into the World Trade Organization in 2001 was an example of this policy.

"It is very important not to have China as an enemy and to try to bring it in as much as possible into world organizations," Albright said.

China's gross domestic product (GDP) has quadrupled since 1978, when the nation's leadership began moving the economy from a sluggish, Soviet-style centrally planned economy to a more market-oriented system.

Measured on a purchasing power parity basis, China in 2004 stood as the second-largest economy in the world after the United States, although in per capita terms the country is still rated as poor.

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